Press Release

Rick_wilson_0409

ACCC GRAIN EXPRESS RULING WELCOMED

2010-12-09

The PGA welcomes the draft notice issued today by ACCC proposing to revoke the immunity from competition provided by CBH's “Grain Express” exclusive dealing notification.

 

Western Graingrowers Chairman, Rick Wilson, endorses the ACCC’s view that

… the notified conduct allows CBH to leverage its market power in supplying receival, storage and handling services to prevent competition to supply transport services to customers who use CBH's upcountry storage facilities.”

 

“Western Graingrowers, in a submission earlier this year to ACCC, warned that CBH was using Grain Express to impede competitive investment and service delivery,” Mr Wilson stated.  “Under the Grain Express system, there exists no incentive for supply chain costs to be driven down.”

 

“CBH has been exploiting the arrangements by levying charges within an opaque environment, with some surcharges not even being known to the purchaser until after the event.”

 

“In July, we submitted that,

“Grain Express is providing cover for CBH to impede new competition in the industry, to restrict effective competition that already exists, and to use their position of privilege that they’ve been granted under Grain Express to expand their share of both the export and domestic grain markets.  We argue that they are doing this at the expense of grain growers.”

 

“ACCC obviously saw through CBH’s tactic to mount a fear-based campaign to prevent an objective review of the effectiveness of Grain Express in regards to the performance of the whole grains industry.”

 

“Some of the advantages of deregulation have been lost through CBH’s free-riding at the expense of growers.  ACCC’s decision will allow the bracing air of competition to begin to remedy this unfortunate loss.”

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